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Is Corporate Social Responsibility a Driver for Target Selection in Mergers and Acquisitions? The Role of Horizontal Versus Diversifying Motives

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Bibliographic Details
Title: Is Corporate Social Responsibility a Driver for Target Selection in Mergers and Acquisitions? The Role of Horizontal Versus Diversifying Motives
Authors: Max Wullenweber
Source: Corporate Social Responsibility and Environmental Management. 32:4448-4461
Publisher Information: Wiley, 2025.
Publication Year: 2025
Subject Terms: ESG, ddc:650, horizontal M&A, resource‐based view, M&A, CSR, target selection
Description: This study examines the role of a target firm's corporate social responsibility (CSR) commitment in the target selection process in mergers and acquisitions (M&A), with a particular focus on how strategic motives shape this relationship. Contrary to the extant literature, which has largely overlooked the interplay between CSR and M&A strategy, this study differentiates between horizontal (within‐industry) and diversifying (across‐industry) M&A transactions. By doing so, this study builds upon previous analyses and illuminates how CSR can be a pivotal factor in M&A decisions, contingent on the strategic motives of the acquirer. Thus, this study positions CSR as an intangible asset that can influence M&A decisions, based on the resource‐based view (RBV) of the firm. The analysis, based on a sample of 3,447 firms from 2009 to 2020, employs logistic regression models and propensity score matching (PSM) techniques to test the relationship between CSR and M&A target selection. The findings indicate that CSR commitment exerts a more substantial influence on the attractiveness of targets in horizontal M&A, compared to diversifying M&A. Furthermore, the environmental dimension of CSR has been identified to be a particularly salient factor in the context of horizontal M&A transactions.
Document Type: Article
Language: English
ISSN: 1535-3966
1535-3958
DOI: 10.1002/csr.3199
Access URL: https://hdl.handle.net/10419/323771
Rights: CC BY
Accession Number: edsair.doi.dedup.....ec72c8a9bedc1a7e55aeadb51e025d70
Database: OpenAIRE
Description
Abstract:This study examines the role of a target firm's corporate social responsibility (CSR) commitment in the target selection process in mergers and acquisitions (M&A), with a particular focus on how strategic motives shape this relationship. Contrary to the extant literature, which has largely overlooked the interplay between CSR and M&A strategy, this study differentiates between horizontal (within‐industry) and diversifying (across‐industry) M&A transactions. By doing so, this study builds upon previous analyses and illuminates how CSR can be a pivotal factor in M&A decisions, contingent on the strategic motives of the acquirer. Thus, this study positions CSR as an intangible asset that can influence M&A decisions, based on the resource‐based view (RBV) of the firm. The analysis, based on a sample of 3,447 firms from 2009 to 2020, employs logistic regression models and propensity score matching (PSM) techniques to test the relationship between CSR and M&A target selection. The findings indicate that CSR commitment exerts a more substantial influence on the attractiveness of targets in horizontal M&A, compared to diversifying M&A. Furthermore, the environmental dimension of CSR has been identified to be a particularly salient factor in the context of horizontal M&A transactions.
ISSN:15353966
15353958
DOI:10.1002/csr.3199